Correlation Between Avita Medical and Neogen
Can any of the company-specific risk be diversified away by investing in both Avita Medical and Neogen at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Avita Medical and Neogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avita Medical and Neogen, you can compare the effects of market volatilities on Avita Medical and Neogen and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Avita Medical with a short position of Neogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avita Medical and Neogen.
Diversification Opportunities for Avita Medical and Neogen
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Avita and Neogen is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Avita Medical and Neogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neogen and Avita Medical is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Avita Medical are associated (or correlated) with Neogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neogen has no effect on the direction of Avita Medical i.e., Avita Medical and Neogen go up and down completely randomly.
Pair Corralation between Avita Medical and Neogen
Given the investment horizon of 90 days Avita Medical is expected to generate 1.0 times more return on investment than Neogen. However, Avita Medical is 1.0 times more volatile than Neogen. It trades about 0.01 of its potential returns per unit of risk. Neogen is currently generating about -0.29 per unit of risk. If you would invest 1,287 in Avita Medical on September 14, 2024 and sell it today you would lose (6.00) from holding Avita Medical or give up 0.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avita Medical vs. Neogen
Performance |
| Timeline |
| Avita Medical |
| Neogen |
Avita Medical and Neogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avita Medical and Neogen
The main advantage of trading using opposite Avita Medical and Neogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avita Medical position performs unexpectedly, Neogen can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Neogen will offset losses from the drop in Neogen's long position.| Avita Medical vs. Clearpoint Neuro | Avita Medical vs. Sight Sciences | Avita Medical vs. Treace Medical Concepts | Avita Medical vs. Rxsight |
| Neogen vs. Qiagen NV | Neogen vs. Aclaris Therapeutics | Neogen vs. IQVIA Holdings | Neogen vs. Medpace Holdings |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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